Yuan rises against dollar on PBOC controls

The Wall Street Journal reports a crackdown by the People’s Bank of China on wagers against the yuan propelled the currency to its largest-ever two-day gain against the dollar, highlighting the rising tension in foreign-exchange markets over the outlook for China. The yuan soared 1.2% on Thursday to 6.7883 against the dollar in offshore trading. The currency has strengthened 2.5% over the past two sessions. The Chinese central bank tightened liquidity in Hong Kong on Thursday by instructing the nation’s banks to withhold funds from other banks, a move that drove the yuan in offshore trading to its highest level since early November. The rate that banks charge each other in Hong Kong’s overnight lending market leapt from 17% to 38%, the highest in a year.